Theresa May tells Brexit supporters to face up to 'hard facts' about leaving the EU

The prime minister rejects "unacceptable" EU demands to keep Northern Ireland aligned to the customs union and single market

However, May accepts "hard facts" that her policy will lead to less trade with Europe.

"Nobody will get everything they want," the prime minister says.

May concedes UK banks will lose passporting rights to the EU.

She says UK side will not "walk out" from Brexit talks.

LONDON — Theresa May today told her party's hardline Brexiteers to face up to the "hard facts" that Brexit will reduce Britain's access to trade in Europe and create problems with the Northern Ireland border.

Speaking in central London, the prime minister accepted for the first time that her plans to leave the single market will mean restricted access to European markets for UK businesses.

"The reality is we all need to face up to some hard facts. We are leaving the single market, our access to each other's markets will be less than it is now," she said.

However, speaking at Mansion House, in central London on Friday, she also rejected growing demands for Britain to retain close ties to EU customs and trade rules after Brexit, saying that Britain must be free to strike new trade deals even if it means restricting access to European markets.

May said any Brexit deal that left Northern Ireland aligned with the EU would be "unacceptable."

"Just like it would be unacceptable to go back to a hard border, it would also be unacceptable to create a customs and regulatory border down the Irish sea," May said.

"I'm not going to let our departure from the EU to setback the historic progress we've made in Northern Ireland."

She added that any deal that left Britain unable to strike trade deals elsewhere would not be agreed to by the UK government.

"Our future customs arrangement [must] leave the UK free to determine its own tariffs with third countries — which would simply not be possible in a customs union," she said.

May's "honest" assesment was welcomed by business groups.

"Business leaders will welcome the Prime Minister's honest admission that negotiating the future UK-EU relationship will involve making difficult choices," Stephen Martin, Director General of the Institute of Directors, said.

The speech was also welcomed by the EU's chief negotiator Michel Barnier who tweeted that it would give "clarity" about the next stage of negotiations.

However the speech was dismissed by another senior EU figure as "vague" and not "serious."

"Theresa May needed to move beyond vague aspirations, we can only hope that serious proposals have been put in the post" the EU parliament's Brexit chief, Guy Verhofstadt, said in a statement.

"While I welcome the call for a deep and special partnership, this cannot be achieved by putting a few extra cherries on the Brexit cake. "

He added: "Our relationship must be close and comprehensive, but this is only possible if the UK Government understands that the EU is a rules based organisation, as there is little appetite to renegotiate the rules of the single market to satisfy a compromise crafted to placate a divided Conservative party."

Eurosceptics in the Conservative party also broadly welcomed it.

Conservative MP and member of the hardline pro-Brexit European Reform Group, Andrew Bridgen, told Business Insider that the speech was "firm but fair."

"I'm very happy both with the tone and content," he said.

"It was firm, fair and reasonable and puts the ball back in Juncker's court. And if they don't accept it they will be seen for what they are, not just by the British people but by the European people who they seem willing to sacrifice on the altar of the European Union."

Watch: May dismisses EU border demands

The prime minister told an audience, including senior members of her own government, that Britain must "[build] a bold and comprehensive economic partnership with our neighbours in the EU [as well as] reaching out beyond to foster trade agreements with nations across the globe."

She promised that any trade deal she negotiated would be "the broadest and deepest possible agreement - covering more sectors and co-operating more fully than any free trade agreement anywhere in the world today."

May conceded that the UK would be willing to pay for continued membership of some European agencies governing chemicals, medicines and aviation.

She also accepted that there would need to be some changes to arrangements on the Northern Ireland border after Brexit.

"We accept this would mean abiding by the rules' and making an appropriate financial contribution," May said.

Road to Brexit

Sky News
The prime minister's "road to Brexit" speech is the latest in a series of interventions on Brexit by senior members of her government and comes after a week which has seen tensions rising inside her party on the issue.

On Wednesday Business Insider reported that eight Remain-supporting Conservative MPs had signed an amendment to one of May's Brexit bills that could force the government to form a new customs union with the EU after Brexit.

Former Conservative minister Stephen Hammond told BI that the amendment, which is being backed by the Labour party, means there is now "undoubtedly a majority" for staying in a customs union with the EU.

However, Brexit-backing Conservative MPs have threatened to force a vote of no confidence in the prime minister if she "backslides" on the customs union, with senior members of her cabinet such as the foreign secretary Boris Johnson also making it a red line in the negotiations.

May today attempted to bring both sides of the Brexit divide together after months of division, saying that her government is now focused on "bringing our country together".

"There have been many different views and voices on the debate and I've listened carefully to them all," May said.

May's 5 Brexit "tests"

The prime minister set out five tests which any Brexit deal with the EU must pass:

These are that it will:

Implement the decision of the British people

Reach an enduring solution

Protect our security and prosperity

Deliver an outcome that is consistent with the kind of country we want to be

Bring our country together and strengthen the precious union of all our people

May reiterated that Brexit would mean leaving both the single market and customs union but said Britain would be willing to make "strong commitments" to certain EU rules and regulations after it has left the bloc.